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The property and casualty insurance
policies that most Americans buy depend on a system by which insurers
file rates—the fees they charge for insurance policies—and forms—the
language and forms insurers use to describe those policies to
consumers. All 50 states and the District of Columbia have separate
laws concerning these rates and forms. Increasingly, these rates and
forms flow through a computer program called the System for Electronic
Rate and Form Filing (SERFF), which is owned and operated by the
National Association of Insurance Commissioners (NAIC). Nineteen states
require that all filings go through SERFF.
The
paper explains the System for Electronic Rate and Form Filing’s
structure and raises questions regarding its usefulness. The paper’s
first section provides a broad overview of the “admitted” or “standard”
insurance market, and describes why rate and form filing are essential
to its continuation in its current form. The second section describes
the history and function of SERFF. The third section discusses three major problems with SERFF. The fourth and final section proposes a series of solutions that would solve these problems. SERFF,
as it currently exists, raises serious practical, equity, and legal
questions—particularly relating to the delegation of taxing
authority—and needs reform.